MUMBAI: PSU banks were bruised and battered recently after investors thrashed their prices to ridiculously lower levels. However, as a chartist, I find value (at least on the charts) and rationale in buying these unwanted stocks as they have approached their long-term support levels.

CNX PSU Bank Index (2074.50)

Investors by traveling this less traveled road can make some decent money. One can look at these counters in the following pecking order not only as short-term trade for 10-20 per cent upside, but also as a long-term investment tool as the first three counters have reached their major long-term downside targets.

CanaraBank (Last close: Rs 212.60)

At the recent low of Rs 201, this scrip appears to have corrected its 10-year price cycle and reached its major downside target placed at Rs 202 on the long-term charts. Hence, one can buy on dips, preferably in the zone of Rs 210-206, with a stop below Rs 201 on a closing basis for an immediate target of Rs 231. Sustaining above the same, higher targets of Rs 241-255 can't be ruled out in the next 10-15 trading sessions.

Oriental Bank of Commerce (Last close: Rs 136.20)

After reaching its major target of Rs 129 on long-term charts, this counter appears to have formed a base at around Rs 124. The stock merits a buy with a stop below Rs 124 on a closing basis for an immediate target of Rs 147 in a few trading session.

However, investors with a slightly higher time frame of 3-4 weeks can expect Rs 187.

Bank of Baroda (Last close: Rs 470.80)

This counter has recovered nicely after testing its major trend line support on long-term charts.

Buy on dips preferably around Rs 450 with a stop below Rs 442 on a closing basis for an initial target of Rs 490 in 1-2 weeks.

Allahabad Bank (Last Close: Rs 71.40)

It is interesting to observe that this counter bottomed out on August 5, 2013, at a low of Rs 65 after which Nifty and other PSU banks witnessed significant value deterioration.

As it is displaying better relative strength over other counters one can buy on dips preferably around Rs 68 with a stop below Rs 65 on a closing basis for an initial target of Rs 74 and higher target of Rs 82 in the next two weeks.

Syndicate Bank (Last close: Rs 64.70)

This scrip bounced back after testing its long-term channel support. Besides, positive divergence on daily time frame as well as higher time frames is attracting bulls.

Hence, one can look at buying in the zone of Rs 63-62 for an immediate target of Rs 70 and a higher target of Rs 74 in the next 5-7 trading sessions with a stop loss below Rs 61 on a closing basis.

Disclaimer: The above recommendations are based on technical views and information given by the analyst. Please consult your financial advisor before taking any position in the stocks mentioned.